- Proposed tax ranges from Rs 100 to over Rs 1 million depending on nature of cultivable land and size of income
The Sindh government is going to tax the agricultural income from next fiscal year FY15.
The levy, long demanded by the Muttahida Qaumi Movement in the Sindh Assembly, has been titled as minimum income tax (MIT) and agriculture income tax (AIT) to be enacted through amending the Sindh Agriculture Income Tax Act 1994.
The proposed tax, which would soon hit the House floor for passage as Sindh Agriculture Income Tax Act 2014, ranges from Rs 100 to over Rs 1 million depending on the nature of cultivable land and size of income made by the farmers.
To take effect from July 1 when Kharif season would starting, the proposed law envisages a Rs 100 to Rs 200 per acre annual MIT on the un-irrigated and irrigated land, respectively.
Whereas the agriculturists possessing matured orchards of banana and beetal leaf would be liable to pay Rs 350 and Rs 700 for their incomes from un-irrigated and irrigated farms.
“Minimum Income Tax should be applicable to cultivated land more than 16 acres or 675 PIUs whichever is more,” reads the proposed law a copy of which is available with Pakistan Today.
Thar desert and Kohistan, according to the bill, would be exempted from MIT. Further, the land owner paying “Ushur” as per Zakat and Ushr Ordinance, 1980 that shall be the total tax payable under the First Schedule.
The second schedule provides for the AIT that would zero in case the net taxable income doesn’t exceed Rs 0.4 million.
The incomes ranging between Rs 0.4 million and Rs 0.75 million would draw 5 percent AIT. Rs 17,500 plus 10 percent of income above Rs 0.7 million on incomes up to Rs 1.5 million.
Rs 92,500 plus 15 percent of income above Rs 1.5 million on incomes totalling at Rs 2.5 million. On Rs 4 million of agriculture income the tax would be Rs 0.242 million plus 20 percent of income above Rs 2.5 million.
Where the net taxable incomes stands up to Rs 6 million the AIT would be applied at rate of Rs 0.54 million plus 25 percent of income above Rs 4 million.
Last rate is Rs 1.04 million plus 30 percent of income above Rs 6 million to be levied on agri income up to Rs 6 million.
The statement of object says that the proposed law aims “to provide for imposition of tax on income from agricultural land in the province of Sindh”.
The law defines agriculture income as “any rent of revenue derived from land which is situated in the province of Sindh and is used for agricultural purpose”.
Given frequenting natural calamities in the province like floods etc the law entitles the affected taxpayer to have his losses set off against his income in a tax year.
Though most of the 91 PPP lawmakers are related to agriculture they are less likely to oppose the proposed law in Sindh Assembly given the fact that the tax is coming from the treasury benches.
More vocal in favour of the law would be the 48 MQM legislators who have long been demanding the levy’s imposition.
The PML-F, PML-N, PTI and NPP are also expected to give the green light to the move that would add some extra billions to the provincial kitty, once implemented.